2004 (1) TMI 331 - HC - Central Excise

Issues Involved:
1. Applicability of para 1.3 of the EXIM Policy.
2. Validity of the Letter of Credit (LC) in light of the notification dated 25.11.2003.
3. Interpretation of the term "publish" and its impact on the enforcement of the notification.
4. Entitlement to import the entire contracted quantity of SKO.
5. Request for extension of the LC validity period due to court proceedings.

Issue-wise Detailed Analysis:

1. Applicability of para 1.3 of the EXIM Policy:
The petitioners argued that para 1.3 of the EXIM Policy protects imports under an irrevocable LC established before the imposition of any restriction. They contended that the notification dated 25.11.2003, imposing restrictions on the import of SKO, was made available to the public only on 27.11.2003. Therefore, the LC opened on 25.11.2003 should be protected under para 1.3. The court agreed, stating that the scope and ambit of para 1.3 had not been properly appreciated by the respondents. The court emphasized that the protection under para 1.3 applies if the LC was established before the date of the restriction, regardless of the shipment date.

2. Validity of the Letter of Credit (LC) in light of the notification dated 25.11.2003:
The respondents argued that the LC was opened on the same date the restriction was imposed, thus not qualifying for protection under para 1.3. However, the court found that the notification was made public only on 27.11.2003, and hence, the LC opened on 25.11.2003 was valid and protected under para 1.3. The court held that the petitioners should not suffer due to the notification's delayed publication.

3. Interpretation of the term "publish" and its impact on the enforcement of the notification:
The court examined various definitions and case law to interpret "publish." It concluded that for a notification to come into force, it must be made publicly accessible. The court cited several judgments, including Harla vs. State of Rajasthan and BK Srinivasan vs. State of Karnataka, to support the view that delegated legislation must be reasonably published to take effect. The court determined that the notification dated 25.11.2003 could only be deemed effective from 27.11.2003, when it was made available to the public.

4. Entitlement to import the entire contracted quantity of SKO:
The petitioners sought to import the entire 25,000 MTS of SKO as per their contract. However, the court held that the protection under para 1.3 of the EXIM Policy is limited to the quantity covered by the irrevocable LC. Since the LC was for US$1,339,000.00 plus/minus 10%, the petitioners could only claim protection for the import of SKO up to this amount, not the entire contracted quantity.

5. Request for extension of the LC validity period due to court proceedings:
The petitioners requested an extension of the LC validity period, citing delays caused by pursuing the matter with authorities and the court's winter vacation. The court acknowledged the delay and directed that the period from 27.12.2003 to 23.1.2004 be excluded when considering the LC's validity. Consequently, the LC's validity was extended to 28.2.2004, allowing the petitioners to import SKO within the monetary limit stipulated in the LC by this extended date.

Conclusion:
The court allowed the petition, directing the respondents to permit the import of SKO to the extent of US$1,339,000.00 plus/minus ten per cent as per the irrevocable LC dated 25.11.2003. The benefit of para 1.3 of the EXIM Policy was made available to the petitioners, provided the shipment took place on or before 28.2.2004. The rule was made absolute to this extent, with no order as to costs.

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